GST Council Recommendations: 28 Per Cent Tax On Online Gaming, Casinos And Horse-Racing; Reduced GST On Food And Beverages In Cinemas

The GST Council on Tuesday (11 July) made several decisions regarding taxation.

One of the key decisions was to impose a uniform 28 per cent tax on the full face value for online gaming, casinos, and horse-racing.

At the same time, the tax rates for uncooked/unfried snack pellets, cancer medicine, and imitation zari thread were reduced.

In addition to the above, the GST Council also addressed the tax rate for food and beverages sold inside multiplexes and clarified the definition of all utility vehicles. These measures were taken to ensure parity in cess levy.

Finance Minister Nirmala Sitharaman said that the intention behind these decisions was not to put an end to any industry related to online gaming, casinos, and horse-racing.

However, there was a discussion on the moral question of whether these industries should be taxed at the same rate as essential items, according to the Finance Minister.

The tax on online gaming, casinos, and horse-racing would be levied on the full value of bets or the full value of consideration paid.

Earlier, the ministerial panel on online gaming, casinos, horse-racing had previously considered an alternative option of taxing the gross gaming revenue or platform fee, but this option did not receive support.

Sitharaman said the tax on online gaming companies would be imposed without making any differentiation based on whether the games required skill or were based on chance, and that there will be an amendment in the GST law to tweak the definition of actionable claim.

The GST Council has also made exemptions on GST for the import of cancer drug Dinutuximab, medicines used to treat rare diseases, and food used in Food for Special Medical Purposes (FSMP).

Private operators providing satellite launch services are also exempted from GST.

Food and beverages consumed in cinema halls will attract a GST of 5 per cent, equivalent to the levy charged in hotels and restaurants, instead of 18 per cent which was being charged by many cinema halls for composite food packages.

The Council also recommended setting up of mechanism for appellate tribunals from 1 August. Demands for state-wise benches were presented by various states, and the Council approved setting up of as many as 40 benches in phases.

The definition of utility vehicles has been modified to include a 22 per cent cess on top of the 28 per cent GST rate. This cess will apply to utility vehicles with an engine capacity of 1500 cc and above, a length of 4 meters and above, and an unladen ground clearance of 170 mm and above. Sedans, however, are not included in this definition.